[00:12] Mike: Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Mike

[00:19] Rob: And I’m Rob.

[00:20] Mike: And we are here to share experiences to help you avoid the same mistakes we’ve made. So what’s this week Rob?

[00:25] Rob: The word is episode 100 sir.

[00:27] Mike: That’s two words.

[00:28] Rob: I know but we finally made it. 99 episodes ago we sat down at these very tables recorded over Skype. What was it, maybe three years ago, two and a half years?

[00:39] Mike: Yeah.

[00:40] Rob: And didn’t we record 10 episodes before releasing a single one to iTunes?

[00:43] Mike: We did.

[00:44] Rob: We were already scared about it if I recall. If people would really want to listen to it but sure has changed over the years.

[00:50] Mike: You know it’s funny because I remember spending so much time doing the editing upfront. It’s not obvious I don’t think when you go back and listen to it but the first episode I think we wrote down every single word we were going to say on the podcast.

[01:03] Rob: Yeah. It’s very very stiff. You’re right we read most not all of it but most of it. There was not much chit chat just kind of and around BSing. Well hey as of today this is obviously a special episode. What we’ve decided to do is invite on nine of the most successful founders that we know and have them give you some startup advice. We will be getting to that a little bit later. But before that, we wanted to chat about some podcast metrics. 100 episodes in and we’re just checking we have feed banner tells us we have just over 2,700 subscribers. So those are people who listen through the RSS feed and we push about 750 gigs, almost a terabyte of audio bandwidth every month. That equates to around 19,000 downloads a month. Since we put out multiple episodes, you don’t really know how much each one is individually downloaded unless you look at logs. But certainly a far cry from when we started off with my mom and your wife listening to the podcast in episode one.

[02:05] Rob: I’ve cut her a few clips of some particularly like things that were related to what she was doing or something funny that you said or something. But no she does not listen. I have friends who listen but not the wife. No one in my family listens actually.

[02:18] Mike: That’s really funny.

[02:19] Rob: So how about iTunes reviews, where do we stand after 100 episodes?

[02:23] Mike: So after 100 episodes, we’re currently sitting at 222 iTunes ratings.

[02:28] Rob: Wow! That’s from all over the world, right?

[02:30] Mike: Yeah.

[02:30] Rob: So, thank you person on the other end of this ear buds listening to us now. Thank you for supporting us, thank you for listening, for subscribing, giving us reviews, giving us feedback, posting comments to the startupsfortherestofus.com blog, giving us questions via email and voicemail, all these things that if we didn’t have that kind of support, we wouldn’t continue to do the podcast, period. The reason we do it is because we love interacting with other entrepreneurs and we love just building that community that allows us to sit down and chat each week and hopefully share some of our knowledge, to learn from you who’s sitting here listening to it now and have events like Microconf and I don’t think we could have pulled off without this podcast.

[03:13] Mike: Oh definitely not. And speaking of comments, I mean we are up to 418 comments on the blog.

[03:25] Rob: Diving right in. As I mentioned before this episode it could be titled ‘Startup Advise from Nine Successful Founders’ and these are some of the most successful founders that we know and you’re probably are going to recognize almost all of the names. What we did is we contacted them and asked them some questions and allowed them to answer just one over either voicemail or an audio format. So to kick it off we have Jason Cohen. He has been a serial entrepreneur. He sold at least two companies for cash. He has been very successful. He started WP Engine a couple of years ago and it’s growing quickly. They are in the tens of employees if I recall and have raised series A, I mean they are on the up shoot. So anyways Jason Cohen responded and he answered the question, what’s the most common mistake you see startup founders make?

[04:14] Jason Cohen: Founders tend to do whatever is comfortable for them, which is whatever they are good at. Developers want to write code. Designers want to build A/B tests. MBAs want to build spreadsheets. The trouble is that by definition the toughest part of your startup is going to be in the things that you are not good at, because you don’t have good ideas. You won’t execute it that well. You don’t have a passion for it. You want to procrastinate it and so on. So those are exactly the kinds of things that will probably make your startup fail. If you write code, it’s probably not your code that will cause your startup to fail. And yet that is where you want to spend all of your time.

[04:48] But getting people to a website willing to pay a specific amount of money for something, that’s probably the hardest and most important part of a new startup. That’s where you need to spend your time. Not writing code. Not worrying about your M.V.P. Not at the beginning. Now in any other large project you tackle the big scary unknown stuff before you go fill in the details you know you can build. And startups are no different from that. So, I know you can write the code. You know you can write the code. That’s exactly why it’s not valuable or useful to write the code. It’s all the other stuff that’s scary and hard. So you gotta tackle that hard scary part first and then you’ve eliminated the biggest risk to your startup. And that sets you up best for success.

[05:27] Mike: So next we talked to Jeff Atwood and who hasn’t heard of Jeff Atwood? But Jeff Atwood he’s the blogger behind codinghorror.com, he was also the co-founder of Stack Overflow, the Stack Overflow podcast and various other ancillary endeavors related to that. We talked to him and he submitted what he thought was the most common piece of advice that he gave to startup founders. So here’s Jeff.

[05:53] Jeff Atwood: Well, I don’t get asked a lot for advice from startup founders. But when I do one of the first things I ask them is “Why the hell are you asking me about this?” Because I feel like it’s the first role of a startup founder to ask your own community what they think of the product. Like, I don’t use your website or your product, probably. And I’m not really probably even in the audience for it most of the time.

[06:19] So, if you’re asking me that seems already sort of misguided and you should be asking your community what you should be doing. You should be talking to your community. You should be talking to the people that use your…your website, your application every day. And asking them what they think. And they’re going to appreciate it a lot more than I do because they’re the ones giving you money or time or whatever the resource is and investing in what it is that you are doing. And not engaging with your community is sort of the number one flaw I see the startups that I’ve advised make.

[06:51] And for some reason they just don’t prioritize it. And I’ve never been able to figure out why because I always found that the community on StackOverflow and StackExchange was the number one source of inspiration for things to do. They certainly won’t hesitate to tell you when they think you’re doing it wrong. Which is often useful.

[07:09] And a lot of the feedback isn’t actionable which is true. So, I would say, on average about 10% of the feedback you get from the community is useful in some way, which means you have to look at 10 posts, 10 units of work to find the one that’s actually potentially useful. So, it’s a lot of work and maybe that’s why some startups don’t want to do it. But, I feel like if you’re not engaging with your community either nobody cares in which case your problem is not that your product has flaws. The problem is that nobody cares about your product. And that’s what you need to fix first.

[07:43] So, the main piece of advice I end up giving a lot of startups… the mistake I see a lot of them make is not having a clubhouse for their community to go to talk about the thing together with each other and also to help each other. The community scales a lot better than you and your small team will. So, make sure you’re listening your community.

[08:01] Rob: Next up we have Derek Sivers. Derek founded CD Baby somewhere in the middle or late 90s. And he grew it to a very successful company, he sold it for 22 million dollars somewhere around 2007, 2008. He has been a pro startup advocate; he shares a lot of knowledge on his blog sivers.org. I highly recommend that you check him out. He’s also working on his next idea. He blogs about all these at sivers.org, so I do encourage you to check it out. Derek answered the question, what’s the most common piece of advice you give to startup founders.

[08:37] Derek Sivers: Have you heard the phrase, hand out your shingle? It’s an old phrase that refers to declaring yourself to be in business, especially a service business like an architect or lawyer or doctor. You’d start your business by making a little sign saying “ARCHITECT” and then you’d hang it on your door now declaring yourself to be in business. So, I think the first thing you should do when you have an idea is to hang out your shingle.

[09:01] Get your idea out into the sunlight to the opinions of the world. And, don’t just ask for feedback on your idea. That’s too hypothetical. But by actually declaring yourself to be in business, by asking people to pay for your service or product, you’ll get much better feedback then just asking for feedback. It’s an old truism that is you want advice, ask for money, but if you want money ask for advice. So, by hanging out your shingle as soon as you have the idea it means you will also start small. Don’t develop the idea too far before putting it out into the world.

[09:37] Businesses always turn out much different than you planned. So, let your plans be shaped by actual public demand, instead of your initial idea. For me, I started CD Baby before PayPal existed and there was no way to charge credit cards online if you were just a musician. So, I launched CD Baby as a payment processing service for musicians. But, only two weeks into it a customer whose card I had charged never received their CD When I called the musician to find out why they said “Oh, hey man, sorry I totally flaked out. I forgot. I’ll do it tomorrow. Wait no not tomorrow, next week. “

[10:13] So, I had to change my plan to handle the CD warehousing and shipping. But, this was a hit. Everybody wanted this order fulfillment service I was providing, right? But, soon my customers, the people that actually bought CDs, were coming back to CDBaby.com every week to see what was new. So, whereas I thought I was an order fulfillment service. My customers were telling me I was actually a retail store. And I’m glad they did because that retail store went on to make me a net profit of about 15 million dollars over the next few years, all because I hung out my shingle when my idea was only a week old. And I let the customers shape it into what it needed to be.

[10:52] Mike: Next up we have Dharmesh Shah. Dharmesh is a very frequent speaker at the business and software conference. I don’t think there’s been a business and software conference yet that he hasn’t spoken at, at least not the one that I’ve been at. He’s also the co-founder of HubSpot which is based out of Cambridge Massachusetts which does a lot of inbound marketing. Here’s what Dharmesh had to say about the most common piece of advice he gave to start up founders.

[11:16] Dharmesh Shah: Once an entrepreneur has what she believes is a reasonably good idea. My advice is generally to get started. Start executing on that idea. A common mistake entrepreneurs make is they wait for that perfect idea. The exceptional idea, that game changing, life transforming, paradigm shifting idea. And the reality that it‘s actually very, very rare for an entrepreneur to start with an exceptional idea. What more commonly happens is they start with a… what they believe to be a reasonably good idea. They start the business. And as they’re working on that reasonably good idea the exceptional idea, kinda of, come about as a result of kind of iteration and tweaking. So sitting on the sidelines its very very rare to just through raw analysis and talking to people, it’s very rare to actually come up with an exceptional idea. The way to get to a great idea is to start with a mediocre idea. A reasonable idea and then tweak it from there.

[12:07] The other reason not to wait on the side lines waiting for that perfect idea is that even if you happen to get lucky. Of the 5 idea that have occurred to you, let’s say, one of them happens to be the exceptional idea. Chances are you wouldn’t know that the idea that you were thinking about was actually exceptional. Because chances are as you talk to smart people that you trust getting feedback on this what you believe to be what might be an exceptional idea. You’re going to get push back. You are going to get reasons from smart people that say “Here’s why this particular idea is just not that exceptional. Here’s why it’s not going to work. Here’s why it’s already been done or tried two or three times before.” Even with exceptional ideas they rarely rarely stand that kind of scrutiny. The only real way to know that an idea is exceptional, try to actually implement it. It doesn’t have to be the perfect solution but just enough to learn what it is about this particular idea that works and doesn’t work and tweak it from there.

[12:57] So my advice is if you have a reasonably good idea and you’re looking to do a startup, my advice is…start up. Get going. Figure out how to tweak that idea as you go.

[13:07] Rob: Our next guest is Eric Sink. Eric Sink worked on the original Internet Explorer team for Microsoft in the 1990s. He left to found his own company called SourceGear which makes a product called Vault Source Control and a number of other spinoffs of that. Erik was instrumental in my getting educated as a software marketer. He has a blog at Ericsink.com where he blogged especially prolifically from about 2000 to maybe 2003, 2004 on the topic of software marketing. He had an angle like no one else at the time. His articles were later published into a book called Eric Sink on the Business of Software and I have it on my bookshelf. I have been a devoted follower of Eric Sink and actually it was a big pleasure to meet him two years ago at Business Software. We were both speakers and I was able to make his acquaintance and thank him for all the advise he shared with me unknowingly. This is Eric Sink. He called in to our voicemail line so it will be a little different call quality but he was also answering the question, what’s the most common piece of advice you give to startup founders.

[14:15] Eric Sink: The advice I give is to understand how to evaluate risks. As a startup founder, as an entrepreneur you’re going to make all kinds of decisions and they’re going to be risky decisions. And typically what we do is we turn to advisors. We ask people what they would do and we ask them about their experience. And the problem with that approach is that invariably our advisors have more experience than us, which means they’ve gotten burned. And invariably they become more conservative over time. And in some cases they’ve forgotten that their early successes happened because they took risks and beat the odds.

[14:53] So, sometimes it’s the lack of experience that provides the courage we need to take risks. Advisors need to help us understand what would happen if we place a bet and lose. But, as an entrepreneur the bet is yours to place. And you need to go in informed about the risks. And then you need to choose whether you want to take the risk or not, but the decision is yours. It’s kind of like in that movie called Stealth, which was an otherwise awful movie. But there’s this great point in the movie where one of the pilots says, after being told that he has very little chance of success at something, he says “I didn’t get this far by being in the 73rd percentile. I like my odds.” And he goes ahead and does it anyway.

[15:38] And sometimes entrepreneurship is just like that. It’s about being told how you could get burned and taking the risk and winning. And that’s where your success is going to come from. And what I often tell people is that if you don’t like the sound of that, if that doesn’t appeal to you. Then maybe you should stop being an entrepreneur and go get a job. Because the reality is that is what entrepreneurship is like. Taking risks and beating them more often than other people do.

[16:06] Mike: Next up we have Andrew Warner. Andrew Warner founded a company called Bradford and Reed when he was in his early 20s. He grew the revenue pretty high, ended up selling the company around the time he probably got very burned out by the company. Surely, after that, he decided that he was going to build another company called Mixergy and right now you can find him at mixergy.com. Andrew is a really tough guy to get in touch with. He’s running all over the place. So we finally caught up to him and here’s what he had to say.

[16:36] Andrew Warner: Hey! It’s Andrew Warner on a run because that’s my advice to you. Take up running or something like it. Because don’t you ever get into times in your life where you can’t get anything done right because you’re not confident. And you’re not confident because you haven’t been able to get anything done right at work. Well, times like that you need something outside of work that’s completely within your control. That you can just totally rock and then go back into the office or the desk and that confidence will carry you through. So, for me that’s running. Even if I stink at work and everything is falling down and we’re losing money, I can go for a four mile run. Cross that four mile line and feel “Hey! I got it! I can do this. I can do anything.” And that carries back into work. So find your version of running. Keep cultivating it even when you don’t think you need it. And then it will be there for you when you do need it. I’m Andrew, again, and Rob congratulations on 100 shows.

[17:31] Rob: Next up is Ruben Gomez. He is a long time friend, founder of bidsketch.com which is proposal software for agencies. Ruben was one of the charter members of the Micropreneur Academy. This was before he launched his product and I had been giving him advice via email and became somewhat of a mentor and advisor for Ruben and I’ve taken great pleasure in seeing the success of BidSketch. Now he’s at the point where he’s mentoring and advising new startup founders. So it was a natural fit for us to ask him what’s the most common mistake you see startup founders make.

[18:12] Ruben Gomez: So the biggest mistake that I see people make is that they’re not clear enough about who their customer is. So, that generally means that they don’t understand their customer well enough and they’re just being too broad about who they’re targeting. So, if I asked them who is your customer? They may say something like, small businesses or freelancers. Ok. Freelancers is a better example but it is still too broad, right, because there are all sorts of different types of freelancers. You have freelance writers, freelance designers, freelance developers. Each one of those has a different problem. They use different language. And they just read different blogs and websites. So, the more specific you can get and the better you can understand your customer the easier it makes everything. Not just website copy but also generating traffic and actually coming up with a solution to solve their problem as well.

[19:06] Mike: Next we talked to Patrick McKenzie. If you’ve ever looked at a bingo card creation software, you can’t possibly have missed his website, bingocardcreator.com. He also runs a blog and a software company called kalzumeus.com. He is a frequent speaker at MicroConf and he has also spoken a couple of times at the Business and Software Conference. Here’s what Patrick said, here is the common piece of advice that he gave to startup founders.

[19:33] Patrick McKenzie: So, probably the most common pattern I see among startup founders is that they have a brilliant idea. They make software to instantiate the idea. They then try to find a customer for it. They can’t find the customer. They come to me and ask me how do they improve their marketing.

[19:46] And, they have things almost exactly backwards. The first thing they should be doing is finding a customer. And understanding that customer well enough to understand what the customer really needs, particularly in a business situation. What they need to increase the revenue of their business or decrease the costs from their business. Then after you understand what the customer really needs you can create products which answer that need. Which might be a software product, a service offering, what have you, a combination of all these. Create the product that directly addresses that need. And then since you have a deep understanding of who your target customer is and where they’re coming from, you can take that deep understanding and let it inform your marketing strategy.

[20:27] For example, if you know that your target customer is going to be the office manager at a professional service business, this lets you A) Target your marketing copy towards the concerns and the aspirations of the office manager, in particular, rather than the aspirations of say the business owner or the person who will actually be performing the services for the clients. And it also lets you find out where that target customer hangs out. For example, office managers actually go to conventions to see how they can do their jobs more efficiently. They are probably not reading Hacker News all day. But they might have particular industry specific websites.

[21:02] They also probably identify more with specific industries than they do with the general title of office manager. So, if you are trying to reach them you would probably go into the industries where you’ve had previous…demonstrated customer success or demonstrate customer need. More adjacent industries and shop it to them directly. Find out where those…folks in those industries hang out. Address them directly. This will make life much easier than trying to retrofit a new customer population on top of a software or service offering that you have no evidence that anyone in the world other than you would ever actually pay money for.

[21:34] Mike: So up next we have Dan and Ian from Lifestyle Business Podcast. And they answered a question about what are some of the common mistakes you see startup founders making.

[21:41] Dan Andrews: Hey! Mike and Rob its Dan and Ian from the Lifestyle Business Podcast. First off big ups on the 100th episode of Startups For The Rest Of Us. We’ve been fans since way back in the day like back when tight gym shorts were popular. You guys have done some amazing stuff and kept us encouraged along our journey as well. So, thanks so much for what you do. We’re going to answer this question; What are some common mistakes you see startup founders making? And Ian is going to kick us off.

[22:06] Ian: Hey, guys congrats on the first 100 episodes. I’ve got a little quick tip. I think it’s important for first time or early developers to focus on less sexy niches with your skill set. So, realize that your skill set may be more valuable to less sexy niches then it is to the shiny niches. So, take those skill sets and attack a market that’s begging for you. One that’s maybe a little less established because there will be less competition and more opportunities.

[22:33] Dan Andrews: Yeah, and that’s basically how Ian and I made a living the last 5 years. So, it’s worked in our case. One other thing that I see people failing to do is change their social circle. Way back in the day Rob said “Hey, Dan you’ve gotta read Never Eat Alone by Keith Ferrazzi. And I put it off and I put it off. And I think that book actually is a great roadmap for doing this kind of thing, which is, you can’t go it alone. You can’t be the only guy who…you know, all your friends have great jobs. And they want you to play fantasy football all the time. They want you to show up to all these parties. At a certain time I think you need to change that social group to get encouragement and perhaps most importantly great critical feedback on the kind of stuff that you are doing. So don’t do this thing alone. Focus on getting a great group of people around you that are going to support your entrepreneurial journey.

[23:16] Ian: That’s right if you have a house pet that doesn’t support what you’re doing, take it to the pound.

[Laughter]

[23:21] Dan Andrews: Alright guys. Congrats on the 100th episode and we’ll be sticking around for the next 100.

[23:26] Rob: And rounding out our esteemed panel of guests, we talked to Peldi Guilizzoni. He is the founder of Balsamiq Markups. He started it as a one person software company. Maybe what do you think , Mike, like four, five years ago?

[23:40] Mike: Yeah. I think it was around 2007.

[23:42] Rob: Yeah and he has since grown to well into the seven figures in revenue and he has at least a dozen employees, he’s based out of Italy and has just had an amazing story to tell and he has always been more than willing to share his experiences. In fact if you read the early posting at balsamiq.com in the blog, he went into in detail, step by step everything he did when he launched. That was a big inspiration for a lot of folks who came after him, really helped them grow their businesses. So he is now an advisor, I’m pretty sure he does some angel investing as well and just generally a nice guy who has spoken at Microconf, spoken at Business Software. We asked him what’s the most common piece of advice you give to startup founders.

[24:28] Peldi Guilizzoni: The most common piece of advice I give to a startup founder is to resist your natural urge to work in a vacuum. Include your customers as much as you can in everything you do. When you are just starting, for instance, do customer development. Find the people who have the pain you are trying to solve before writing any code. Only start coding when you have a group of people lined up to buy your product as soon as it is ready.

[24:53] When coding release everything as quickly as possible. Stop yourself from thinking through every possible use case. Build only the main use case and release it quickly. 90% of the time you see that it’s enough. If it’s not enough add the little piece that’s missing and go back to listening. Forget secrecy, buzz, or trying to make a splash. Those are all exhausting short term things which don’t matter in the long run. A tight feedback loop with an enthusiastic community is so much more valuable. It’s the best form of marketing and it is something your competition can not easily replicate. Good luck!

[25:31] Music

[25:35] Mike: So again we want to say a big thanks to everyone who submitted answers to those questions and especially to you the listeners. This podcast wouldn’t be here without you. It’s really inspirational to hear the stories from you guys, the question that you have and to be able to know that we are helping you out and that obviously we do get some satisfaction out of helping you guys out. So feel free to send in any more questions you have and we look forward to hearing you over the next however many episodes that there are for Startups for the rest of us podcast and hopefully you’ll listen to the end. Rob take it away.

[26:07] Rob: If you have a question or comment, you can call it into our voicemail number. Its 888-801-9690 or email it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from ‘“We’re Outta Control” by MoOt, used under Creative Commons. You can subscribe to this podcast in iTunes by searching for startups or via RSS that’s startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening to us for 100 episodes and we will see you next time.

Great episode guys, as somebody who has been involved a little bit in startups, I want to add on to what Eric Sink was talking about with a quote going back over 400 years from the famous English philosopher Francis Bacon:

“The errors of young men are the ruin of business; but the errors of aged men amount but to this, that more might have been done, or sooner. Young men, in the conduct and manage of actions, embrace more than they can hold; stir more than they can quiet; fly to the end, without consideration of the means and degrees; pursue some few principles which they have chanced upon absurdly; care not to innovate, which draws unknown inconveniences; use extreme remedies at first; and that which doubleth all errors will not acknowledge or retract them; like an unready horse, that will neither stop nor turn. Men of age object too much, consult too long, adventure too little, repent too soon, and seldom drive business home to the full period, but content themselves with a mediocrity of success. Certainly it is good to compound employments of both.”

Apart from the part about younger people who do not “care not to innovate”, I think this can still be applied today.

Mike and Rob, big congrats on 100 episodes!!! I’ve been listening to your podcast via Stitcher for about a year and the real world advice and insight you guys provide has been extremely beneficial. I started my own small business earlier this year and finally released v1.0 of System Frontier yesterday. It’s not perfect, but it’s what you guys might call “minimally viable”. I’ve already got a few Fortune 500 companies kicking the tires and I hope to have my first customer before year’s end. I’m looking forward to growing my business while listening to Episode 101 and beyond. Keep up the great work.

Hearty congratulations on reaching 100 episodes. Your podcasts have been a constant source of inspiration to me as I move along the road of getting my first SaaS app off the ground. You answered one of my questions around episode 68ish – thanks heaps also for that.

Thanks again and I hope you keep going for at least another 100 episodes.

Congrats on the great run guys! I’ve been getting tons out of your show for a long time now… i still remember that nasty joke you made around ep50 about quitting the show and it almost put me in a panic… hope very much to see another 100.